HBR Case Study on Morning Star:

Running a industry leading organization without managers

 Introduction
Company Profile
• California based agribusiness and food processing company which is a global leader in the
tomato processing market

• Established in the year in 1970 by Chris Rufer, as tomato trucking operations, who continues
to be the CEO till date

• Processes 25% of the California processing tomato production, and supplies approximately
40% of the U.S. industrial tomato paste and diced tomato markets

Size
• 400 full time employees
• 23 business units
Company Dimensions
Units
• 3 large plants for processing
• Canned tomatoes for super markets
• Trucking company
• Business for handling harvesting
Revenue
• $700 million a year in
revenue
• They receive double digit
growth rate compared to
the 1% of their competitors

Company Vision
To create a company in which all team members “will be self-managing, initiating communications and the
coordination of their activities with fellow colleagues, customers, suppliers, and fellow industry participants,
absent directives from others
Organization Design
Organization Structure
• Specialized tasks
• Strict Hierarchy, many rules
• Vertical communication &
reporting systems
• Few teams, task forces or
integrators
• Centralized decision making
• No boss , no hierarchy, no promotions
• Employees Negotiate responsibilities with peers
• through (CLOU: Colleague letter of understanding)
• Everyone can spend company’s money
• Individual’s responsibility to acquire tools needed
• Compensation decisions are peer based
Organization Culture – It is all about self management
• There are no corner offices in our Chicago headquarters. In fact, there are no offices at all

• At Morningstar, the open environment reflects belief that anyone at any level can voice their ideas and take
part in making them happen

• For all bigger decisions , a jury of experienced professional is set to make final decisions and resolve
differences arising from conflicts

• Across Morningstar’s groups and global offices, we rely on every individual to contribute their ideas and
perspectives to help us continually improve how we serve investors

• No one has the right to kill ideas and staff seldom take big decisions all by themselves
Key points of learnings and implications

• Moving up is about competency and

reputation, not the office you hold.
• Freedom and expression in work leads
employee to think about the business
holistically and innovation. information silos
do not help.
• People will be loyal to the company under self
management.